Introduction to FATCA Reporting

A Participating Foreign Financial Institution (PFFI) reports information based on the time and manner prescribed in the regulation. The reporting information corresponds to those U.S. accounts maintained at any time during each calendar year and is required to be reported to the IRS under the FFI agreement.

Some of the key reporting information obtained and exchanged by the PFFI with the IRS is described below:

1. The name, address, and U.S. TIN of each specified U.S. person, that is, an account holder of such accounts. For a non-U.S. entity, after the due diligence procedures are applied, the entity is identified as having one or more Controlling Persons who is a specified U.S. person. Under these circumstances, the name, address, and U.S. TIN (if any) of such an entity and specified U.S. person is considered.
2. The account number (or functional equivalent in the absence of an account number).
3. The account balance or value (including, in the case of a cash value insurance contract or annuity contract, the cash value or surrender value) at the end of the relevant calendar year, other appropriate reporting period or, if the account was closed during that year, immediately before closure.
4. For a Custodial account:
   • The total gross amount of interest, the total gross amount of dividends, and the total gross amount of other income generated regarding the assets held in the account, in each case, paid or credited to the account (or regarding the account) during the calendar year or other appropriate reporting periods.
   • The total gross proceeds from the sale or redemption of property paid or credited to the account during the calendar year or other appropriate reporting periods with respect to which, the Reporting Financial Institution acts as a custodian, broker, nominee, or an agent for the account holder.
5. In the case of any depository account, the total gross amount of interest paid or credited to the account during the calendar year or other appropriate reporting period.
6. All with holdable income in the case of depository accounts:
   • The aggregate gross amount of interest paid or credited to the account during the calendar year.
7. All with holdable income in the case of custodial accounts:
   • The aggregate gross amount of dividends paid or credited to the account during the calendar year.
   • The aggregate gross amount of interest paid or credited to the account during the calendar year.
   • The gross proceeds from the sale or redemption of property paid or credited to the account during the calendar year with respect to which the FFI acted as a custodian, broker, nominee, or otherwise as an agent for the account holder.
   • The aggregate gross amount of all other income paid or credited to the account during the calendar year.
8. For Foreign reportable amounts:
   • The aggregate gross amount of foreign reportable amounts paid or credited to a Nonparticipating FFI is reported as 'FATCA Other' payment.

Product Configuration

This section orients the user towards the parameter setup required for building the reporting database and reporting under FATCA. The FATCA reporting feature is licensed under the FATCA Reporting (FE) module. This module has a dependency with FATCA (FA) module that deals with FATCA client identification.

The bank configures the parameters required for FATCA reporting. The screenshot below outlines the components in the FE module.

Illustrating Model Parameters

Parameters configured in Model Bank are given below:

Parameters	Description
FATCA.REPORTING.PARAMETER	Specifies high-level parameter details that govern yearly reporting required under FATCA Specifying the date in the Rep Extract Date field enables the user to extract the base data for reporting. It is always recommended to set the date to 31st December of the year. If the set date is a holiday, then the extraction is done on the previous working day As only specific clients need to be reported, the reportable statuses (based on FATCA STATUS of the client in FATCA CUSTOMER SUPPLEMENTARY INFO) are specified in the parameter table. For certain clients (Passive NFFEs, Owner Documented FFIs), the details of substantial and beneficial owners are also to be reported The user can specify the following in the parameter table: default address for reporting (CUSTOMER or DE ADDRESS) whether pool reporting is required for recalcitrant clients whether accounts are to be reported in account currency or USD whether accounts with balance less than USD 50000 needs to be reported US reportable accounts are identified under FATCA based on the following: whether the balance or value of the financial account is above the thresholds defined for each customer type or not. whether the accounts existed before the FATCA effective date or not. whether the account is a depository or custodial account. Specifies reporting requirements that relate to reporting of payments made to custodial and depository accounts and non-participating financial institutions The aggregate balances records (FATCA AGGREGATE BALANCE) for all customers are generated by the system at the year end. The aggregate balance serves the following purposes: determines year-end balance for reporting due diligence processing of existing clients If there are closed accounts (where FATCA STATUS is set to ‘INACTIVE’), then FATCA.TAX.BASE application is updated with the payment details on the status change date The system identifies the FATCA CUSTOMER SUPPLEMENTARY INFO (FCSI) with FATCA.STATUS as ‘NON.PARTICIPATING’ and reports the payments made. However, the account balances for Non-Participating Financial Institutions are zero Static info functionality for capturing static details of the customer is enabled by setting the MAINTAIN STATIC INFO field to Yes in FATCA reporting parameter. For bulk XML generation, enter values in the Merge Routine and EB Transform Key fields.
FATCA.TAX.BASE	User can access this system-generated file with data to be reported such as Customer name, address, tax identification number (TIN)/EIN/GIIN details, ownership details (passive NFFEs, Owner documented FFIs), client type and account balance details (in 2015, the 2014 year-end account balance is reported) including details of accounts or in which the client is a joint owner

Illustrating Model Products

Model products are not applicable for this module.